Lifeline is a government sponsored program, but who is paying for it. Some people claim that the government is using taxpayer’s money to run this program, however, the claim is false. Universal Service Fund (USF) which is administers by Federal Communication Commission along the Universal Service Administration Company (USAC), pays for the Lifeline phone assistance program.
The Universal Service Fund (USF) was created back in 1997 by Federal Communication Commission in order to achieve the goals set by the Congress under the Telecommunication Act of 1996. According to the Act, telecommunication service providers are obliged to contribute a portion of their interstate and international telecommunications revenues. These companies include paging service providers, wireless telephone companies, wire-line telephone companies, and Voice over Internet Protocol service providers. Some of the paying customers might find a line item named ‘Universal Service’ on their telephone bills. This is because some telecom companies choose to collect the amount they need to contribute to Universal Service Fund, from their subscribers. Federal Communication Commissions doesn’t require this charge to be passed to the customers. The telecom company decides how they will manage their USF contribution costs. But they can’t charge an amount that is more than they need to contribute to the USF. These charges appear as a percentage of the original phone bill. They also can’t collect any charges from the Lifeline customers. The percentage of contribution of the telecom companies is renewed every quarter depending on the demand of the Universal Service Fund.